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Decree 342: What the Relaxed Economic Needs Test Means for Foreign-Invested Retailers in Vietnam
Effective from 18 October 2026, Decree No. 342/2026/ND-CP updates the framework for foreign-invested retailers in Vietnam, expanding exemptions from the Economic Needs Test (ENT) and streamlining licensing procedures.
Key changes include:
- Existing ENT exemptions retained: Qualifying second or subsequent retail outlets under 500 m², located in shopping centres and not operating as convenience stores or mini-supermarkets, remain exempt.
- Treaty-based exemptions formalised: Investors from countries with treaties or free trade agreements (FTAs) committing to remove the ENT, including the EVFTA, CPTPP and UKVFTA, are formally exempt, subject to the conditions and implementation roadmaps of the relevant agreements.
- Simplified licensing procedures: Consultation with the Ministry of Industry and Trade is no longer required, while provincial authorities assume a greater role in licensing.
- Application requirements: Applicants must have no overdue tax liabilities on the submission date and must comply with applicable land, planning, construction, fire safety and environmental requirements.
- Additional security reviews: Reviews involving the Ministry of Public Security and the Ministry of National Defence may apply to non-treaty investors, large digital commerce platforms and extensive retail networks.
For German retailers, the EVFTA may provide a pathway to more efficient expansion, subject to treaty eligibility and applicable conditions. Investors should verify their eligibility, tax status and site compliance before submitting applications.
Contributed by RÖDL Vietnam
VAT refunds under Official Letter 6936: How tax authorities now assess risk along the supply chain
Alongside these operational considerations, businesses should also pay attention to how tax authorities assess the reliability of transactions when processing VAT refund claims. On 18 September 2026, the Department of Taxation issued Official Letter No. 6936/CT-QLTT, asking provincial and municipal tax departments to apply VAT refund procedures strictly and uniformly.
Key implications for businesses include:
- Risk-based assessment: VAT refund applications are classified according to available risk data, with processing conducted in line with the applicable risk classification.
- Supply-chain scrutiny: Authorities will consider risk information relating to sellers and other entities throughout the supply chain, including suppliers’ VAT declarations and tax payments.
- Risk warnings do not automatically mean rejection: A risk indicator does not, by itself, mean that a VAT refund claim will be denied.
- Targeted verification: Where only part of a claim or particular suppliers raise concerns, verification should focus on the relevant transactions and identified risk areas.
For businesses claiming VAT refunds, the practical priority is to maintain complete transaction records and supporting documentation, conduct appropriate supplier checks, and be prepared to explain transactions flagged during verification. Clear and comprehensive documentation remains essential to supporting refund claims and responding to tax authority enquiries.
Contributed by RÖDL Vietnam
